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tv   U.S. Senate Votes to Proceed to Debate on Health Care Bill  CSPAN  July 25, 2017 6:15pm-8:16pm EDT

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year 2020, 0 percent; "(iii) in the case of calendar year 2021, 0 percent; "(iv) in the case of calendar year 2022, 7 percent; "(v) in the case of calendar year 2023, 14 percent; "(vi) in the case of calendar year 2024, 21 percent; "(vii) in the case of calendar year 2025, 28 percent; and "(viii) in the case of calendar year 2026, 35 percent. "(c)advance payment; retrospective adjustment. "(i) in general. if the administrator deems it appropriate, the administrator shall make payments under this subsection for each year on the basis of advance estimates of expenditures submitted by the state and such other investigation as the administrator shall find necessary, and shall reduce or increase the payments as necessary to adjust for any overpayment or underpayment for prior years. "(ii) misuse of funds. if the administrator determines that a state is not using funds
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paid to the state under this subsection in a manner consistent with the description provided by the state in its application approved under paragraph (1), the administrator may withhold payments, reduce payments, or recover previous payments to the state under this subsection as the administrator deems appropriate. "(d) flexibility in submittal of claims. nothing in this subsection shall be construed as preventing a state from claiming as expenditures in the year expenditures that were incurred in a previous year. "(6) required uses. "(a) premium stabilization and incentives for individual market participation. in determining allotments for states under this subsection for each of calendar years 2019, 2020, and 2021, the administrator shall ensure that at least $5,000,000,000 of the amounts appropriated for each such year under paragraph (4)(a) are used by states for the purposes described in paragraph (1)(a)(ii) and in accordance with guidance issued by the administrator not later than 30 days after the date of enactment of this subsection that specifies the parameters for the
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use of funds for such purposes. "(b)assistance with out-of-pocket costs. in determining allotments for states under this subsection for each of calendar years 2020 through 2026, the administrator shall ensure that at least $15,000,000,000 of the amounts appropriated for each of calendar years 2020 and 2021 under paragraph (4)(a), and at least $14,000,000,000 of the amounts appropriated for each of calendar years 2022 through 2026 under such paragraph, are used by states for the purposes described in paragraph (1)(a)(iv) and in accordance with guidance issued by the administrator not later than september 1, 2019, that specifies the parameters for the use of funds for such purposes. "(7) exemptions.-paragraphs (2), (3), (5), (6), (8), (10), and (11) of subsection (c) do not apply to payments under this subsection." (b) other title xxi amendments. (1) section 2101 of such act (42 u.s.c. 1397aa) is amended (a) in subsection (a), in the
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matter preceding paragraph (1), by striking "the purpose" and inserting "except with respect to short-term assistance activities under section 2105(h) and the long-term state stability and innovation program established in section 2105(i), the purpose"; and (b) in subsection (b), in the matter preceding paragraph (1), by inserting "subsection (a) or (g) of" before "section 2105". (2)section 2105(c)(1) of such act (42 u.s.c. 1397ee(c)(1)) is amended by striking "and may not include" and inserting "or to carry out short-term assistance activities under subsection (h) or the long-term state stability and innovation program established in subsection (i) and, except in the case of funds made available under subsection (h) or (i), may not include". (3)section 2106(a)(1) of such act (42 u.s.c. 1397ff(a)(1)) is
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amended by inserting "subsection (a) or (g) of" before "section 2105". section 107, better care reconciliation implementation fund. (a) in general. there is hereby established a better care reconciliation implementation fund (referred to in this section as the "fund") within the department of health and human services to provide for federal administrative expenses in carrying out this act. (b)funding. there is appropriated to the fund, out of any funds in the treasury not otherwise appropriated, $500,000,000. section 108, repeal of the tax on employee health insurance premiums and health plan benefits. (a) in general. chapter 43 of the internal revenue code of 1986 is amended by striking section 4980i. (b) effective date. the amendment made by subsection (a) shall apply to taxable years beginning after december 31, 2019. (c) subsequent effective date. the amendment made by subsection (a) shall not apply to taxable years beginning after december
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31, 2025, and chapter 43 of the internal revenue code of 1986 is amended to read as such chapter would read if such subsection had never been enacted. section 109, repeal of tax on over-the-counter medications. (a) hsas. subparagraph (a) of section 223(d)(2) of the internal revenue code of 1986 is amended by striking "such term" and all that follows through the period. (b) archer msas. subparagraph (a) of section 220(d)(2) of the internal revenue code of 1986 is amended by striking "such term" and all that follows through the period. (c) health flexible spending arrangements and health reimbursement arrangements. section 106 of the internal revenue code of 1986 is amended by striking subsection (f). (d) effective dates. (1) distributions from savings accounts. the amendments made by subsections (a) and (b) shall apply to amounts paid with respect to taxable years
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beginning after december 31, 2016. (2) reimbursements. the amendment made by subsection (c) shall apply to expenses incurred with respect to taxable years beginning after december 31, 2016. section 110, repeal of tax on health savings accounts. (a) hsas. section 223(f)(4)(a) of the internal revenue code of 1986 is amended by striking "20 percent" and inserting "10 percent". (b) archer msas. section 220(f)(4)(a) of the internal revenue code of 1986 is amended by striking "20 percent" and inserting "15 percent". (c) effective date. the amendments made by this section shall apply to distributions made after december 31, 2016. section 111, repeal of limitations on contributions to
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flexible spending accounts. (a) in general. section 125 of the internal revenue code of 1986 is amended by striking subsection (i). (b) effective date. the amendment made by this section shall apply to plan years beginning after december 31, 2017. section 112, repeal of tax on prescription medications. subsection (j) of section 9008 of the patient protection and affordable care act is amended to read as follows: "(j) repeal. this section shall apply to calendar years beginning after december 31, 2010, and ending before january 1, 2018." section 113, repeal of medical device excise tax. section 4191 of the internal revenue code of 1986 is amended by adding at the end the following new subsection: "(d) applicability. the tax imposed under subsection (a) shall not apply to sales
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after december 31, 2017." section 114, repeal of health insurance tax. subsection (j) of section 9010 of the patient protection and affordable care act is amended by striking ", and" at the end of paragraph (1) and all that follows through "2017". section 115, repeal of elimination of deduction for expenses allocable to medicare part d subsidy. (a) in general. section 139a of the internal revenue code of 1986 is amended by adding at the end the following new sentence: "this section shall not be taken into account for purposes of determining whether any deduction is allowable with respect to any cost taken into account in determining such payment." (b) effective date. the amendment made by this section shall apply to taxable years beginning after december 31, 2016. section 116 repeal of chronic care tax.
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(a) in general. subsection (a) of section 213 of the internal revenue code of 1986 is amended by striking "10 percent" and inserting "7.5 percent". (b)effective date. the amendment made by this section shall apply to taxable years beginning after december 31, 2016. section 117, repeal of tanning tax. (a) in general. the internal revenue code of 1986 is amended by striking chapter 49. (b) effective date. the amendment made by this section shall apply to services performed after september 30, 2017. section 118, purchase of insurance from health savings account. (a) purchase of high deductible health plans. (1) in general.-paragraph (2) of section 223(d) of the internal revenue code of 1986, as amended by section 109(a), is amended- (a) by striking "and any dependent (as defined in section
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152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(b) thereof) of such individual" in subparagraph (a) and inserting "any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(b) thereof) of such individual, and any child (as defined in section 152(f)(1)) of such individual who has not attained the age of 27 before the end of such individual's taxable year" (b) by striking subparagraph (b) and inserting the following: "(b)health insurance may not be purchased from account.-except as provided in subparagraph (c), subparagraph (a) shall not apply to any payment for insurance.", and (c)by striking "or" at the end of subparagraph (c)(iii), by striking the period at the end of subparagraph (c)(iv) and inserting ", or", and by adding at the end the following: "(v) a high deductible health plan but only to the extent of
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the portion of such expense in excess of- "(i) any amount allowable as a credit under section 36b for the taxable year with respect to such coverage "(ii) any amount allowable as a deduction under section 162(l) with respect to such coverage, or "(iii) any amount excludable from gross income with respect to such coverage under section 106 (including by reason of section 125) or 402(l)." (2) effective date. the amendments made by this subsection shall apply with respect to amounts paid for expenses incurred for, and distributions made for, coverage under a high deductible health plan beginning after december 31, 2017. (b) consumer freedom plans. (1) in general. section 223(d)(2)(c) of the internal revenue code of 1986, as amended by subsection (a) and section 122, is amended- (a) by striking "or" at the end
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of clause (iv), by striking the period at the end of clause (v), and by adding at the end the following: "(vi) any plan which- "(i) is offered by a health insurance issuer which meets the conditions described in section 212(b) of the better care reconciliation act of 2017 for the plan year, and "(ii) would not be permitted to be offered in the market but for such section.", and (b) by inserting "or (vi)" after "clause (v)" in the last sentence thereof. (2) effective date. the amendments made by this subsection shall to taxable years beginning after december 31, 2019. section 119, maximum contribution limit to health savings account increased to amount of deductible and out-of-pocket limitation. (a) self-only coverage. section 223(b)(2)(a) of the internal revenue code of 1986 is amended by striking "$2,250" and inserting "the amount in effect under subsection
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(c)(2)(a)(ii)(i)". (b) family coverage. section 223(b)(2)(b) of such code is amended by striking "$4,500" and inserting "the amount in effect under subsection (c)(2)(a)(ii)(ii)". (c) cost-of-living adjustment. section 223(g)(1) of such code is amended (1)by striking "subsections (b)(2) and" both places it appears and inserting "subsection", and (2) in subparagraph (b), by striking "determined by" and all that follows through "'calendar year 2003'." and inserting "determined by substituting 'calendar year 2003' for 'calendar year 1992' in subparagraph (b) thereof." (d) effective date. the amendments made by this section shall apply to taxable years beginning after december 31, 2017. section 120, allow both spouses to make catch-up contributions
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to the same health savings account. (a) in general. section 223(b)(5) of the internal revenue code of 1986 is amended to read as follows: "(5)special rule for married individuals with family coverage.- "(a) in general. in the case of individuals who are married to each other, if both spouses are eligible individuals and either spouse has family coverage under a high deductible health plan as of the first day of any month "(i)the limitation under paragraph (1) shall be applied by not taking into account any other high deductible health plan coverage of either spouse (and if such spouses both have family coverage under separate high deductible health plans, only one such coverage shall be taken into account) "(ii) such limitation (after application of clause (i)) shall be reduced by the aggregate amount paid to archer msas of such spouses for the taxable year, and "(iii) such limitation (after application of clauses (i) and (ii)) shall be divided equally between such spouses unless they agree on a different division.
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"(b)treatment of additional contribution amounts.-if both spouses referred to in subparagraph (a) have attained age 55 before the close of the taxable year, the limitation referred to in subparagraph (a)(iii) which is subject to division between the spouses shall include the additional contribution amounts determined under paragraph (3) for both spouses. in any other case, any additional contribution amount determined under paragraph (3) shall not be taken into account under subparagraph (a)(iii) and shall not be subject to division between the spouses." (b)effective date. the amendment made by this section shall apply to taxable years beginning after december 31, 2017. section 121, special rule for certain medical expenses incurred before establishment of (a) in general. section 223(d)(2) of the internal revenue code of 1986 is amended by adding at the end the following new subparagraph: "(d)treatment of certain medical expenses incurred before
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establishment of account. if a health savings account is established during the 60-day period beginning on the date that coverage of the account beneficiary under a high deductible health plan begins, then, solely for purposes of determining whether an amount paid is used for a qualified medical expense, such account shall be treated as having been established on the date that such coverage begins." (b) effective date. the amendment made by this subsection shall apply with respect to coverage under a high deductible health plan beginning after december 31, 2017. sec.122.exclusion from hsas of high deductible health plans which do not include protections for life. (a) in general. subparagraph (c) of section 223(d)(2) of the internal revenue code of 1986 is amended by adding at the end the following flush sentence: "a high deductible health plan shall not be treated as described in clause (v) if such plan includes coverage for abortions (other than any abortion necessary to save the
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life of the mother or any abortion with respect to a pregnancy that is the result of an act of rape or incest).". (b) effective date. the amendment made by this section shall apply with respect to coverage under a high deductible health plan beginning after december 31, 2017. sec.123.federal payments to states. (a) in general. notwithstanding section 504(a), 1902(a)(23), 1903(a), 2002, 2005(a)(4), 2102(a)(7), or 2105(a)(1) of the social security act (42 u.s.c. 704(a), 1396a(a)(23), 1396b(a), 1397a, 1397d(a)(4), 1397bb(a)(7), 1397ee(a)(1)), or the terms of any medicaid waiver in effect on
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the date of enactment of this act that is approved under section 1115 or 1915 of the social security act (42 u.s.c. 1315, 1396n), for the 1-year period beginning on the date of enactment of this act, no federal funds provided from a program referred to in this subsection that is considered direct spending for any year may be made available to a state for payments to a prohibited entity, whether made directly to the prohibited entity or through a managed care organization under contract with the state. (b)definitions.-in this section: (1)prohibited entity.-the term "prohibited entity" means an entity, including its affiliates, subsidiaries, successors, and clinics- (a)that, as of the date of enactment of this act- (i)is an organization described in section 501(c)(3) of the internal revenue code of 1986 and exempt from tax under section 501(a) of such code; (ii)is an essential community provider described in section
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156.235 of title 45, code of federal regulations (as in effect on the date of enactment of this act), that is primarily engaged in family planning services, reproductive health, and related medical care; and (iii)provides for abortions, other than an abortion- (i)if the pregnancy is the result of an act of rape or incest; or (ii)in the case where a woman suffers from a physical disorder, physical injury, or physical illness that would, as certified by a physician, place the woman in danger of death unless an abortion is performed, including a life-endangering physical condition caused by or arising from the pregnancy itself; and (b)for which the total amount of federal and state expenditures under the medicaid program under title xix of the social security act in fiscal year 2014 made directly to the entity and to
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any affiliates, subsidiaries, successors, or clinics of the entity, or made to the entity and to any affiliates, subsidiaries, successors, or clinics of the entity as part of a nationwide health care provider network, exceeded $350,000,000. (2)direct spending. the term "direct spending" has the meaning given that term under section 250(c) of the balanced budget and emergency deficit control act of 1985 (2 u.s.c. 900(c)). amended- u.s.c. 1396a(a)(47)(b)), by inserting "and provided that any such election shall cease to be effective on january 1, 2020, and no such election shall be made after that date" before the semicolon at the end;
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(2)in section 1915(k)(2) (42 u.s.c. 1396n(k)(2)), by striking "during the period described in paragraph (1)" and inserting "on or after the date referred to in paragraph (1) and before january 1, 2020"; and (3)in section 1920(e) (42 u.s.c. 1396r-1(e)), by striking "under clause (i)(viii), clause (i)(ix), or clause (ii)(xx) of subsection (a)(10)(a)" and inserting "under clause (i)(viii) or clause (ii)(xx) of section 1902(a)(10)(a) before january 1, 2020, section 1902(a)(10)(a)(i)(ix),". sec.125.medicaid expansion. (a)in general.-title xix of the social security act (42 u.s.c.
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1396 et seq.) is amended- (1)in section 1902 (42 u.s.c. 1396a)- (a)in subsection (a)(10)(a)- (i)in clause (i)(viii), by inserting "and ending december 31, 2019," after "2014,"; and (ii)in clause (ii), in subclause (xx), by inserting "and ending december 31, 2017," after "2014,", and by adding at the end the following new subclause: "(xxiii)beginning january 1, 2020, who are expansion enrollees (as defined in subsection (nn)(1));"; and (b)by adding at the end the following new subsection: "(nn)expansion enrollees.- "(1) in general. in this title, the term 'expansion enrollee' means an individual- "(a) who is under 65 years of age; "(b) who is not pregnant;
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"(c) who is not entitled to, or enrolled for, benefits under part a of title xviii, or enrolled for benefits under part b of title xviii; "(d) who is not described in any of subclauses (i) through (vii) of subsection (a)(10)(a)(i); and "(e) whose income (as determined under subsection (e)(14)) does not exceed 133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved. "(2) application of related provisions. any reference in subsection (a)(10)(g), (k), or (gg) of this section or in section 1903, 1905(a), 1920(e), or 1937(a)(1)(b) to individuals described in subclause (viii) of subsection (a)(10)(a)(i) shall be deemed to include a reference to expansion enrollees."; and
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(2)in section 1905 (42 u.s.c. 1396d) (a) in subsection (y)(1) (i)in the matter preceding subparagraph (a), by striking ", with respect to" and all that follows through "shall be equal to" and inserting "and that has elected to cover newly eligible individuals before march 1, 2017, with respect to amounts expended by such state before january 1, 2020, for medical assistance for newly eligible individuals described in subclause (viii) of section 1902(a)(10)(a)(i), and, with respect to amounts expended by such state after december 31, 2019, and before january 1, 2024, for medical assistance for expansion enrollees (as defined in section 1902(nn)(1)), shall be equal to the higher of the percentage otherwise determined for the state and year under subsection (b) (without regard to this subsection) and";
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(ii)in subparagraph (d), by striking "and" after the semicolon; (iii)by striking subparagraph (e) and inserting the following new subparagraphs: "(e)90 percent for calendar quarters in 2020; "(f)85 percent for calendar quarters in 2021; "(g)80 percent for calendar quarters in 2022; and "(h)75 percent for calendar quarters in 2023."; and (iv)by adding after and below subparagraph (h) (as added by clause (iii)), the following flush sentence: "the federal medical assistance percentage determined for a state and year under subsection (b) shall apply to expenditures for medical assistance to newly eligible individuals (as so described) and expansion enrollees (as so defined), in the case of a state that has elected to cover newly eligible individuals before march 1, 2017, for calendar quarters after 2023, and, in the case of any other state, for calendar quarters (or portions of calendar quarters) after february 28, 2017."; and
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(b)in subsection (z)(2)- (i)in subparagraph (a)- (i)by inserting "through 2023" after "each year thereafter"; and (ii)by striking "shall be equal to" and inserting "and, for periods after december 31, 2019 and before january 1, 2024, who are expansion enrollees (as defined in section 1902(nn)(1)) shall be equal to the higher of the percentage otherwise determined for the state and year under subsection (b) (without regard to this subsection) and"; and (ii)in subparagraph (b)(ii)-
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(i)in subclause (iii), by adding "and" at the end; and (ii)by striking subclauses (iv), (v), and (vi) and inserting the following new subclause: "(iv)2017 and each subsequent year through 2023 is 80 percent." (b)sunset of medicaid essential health benefits requirement. section 1937(b)(5) of the social security act (42 u.s.c. 1396u-7(b)(5)) is amended by adding at the end the following: "this paragraph shall not apply after december 31, 2019." sec.126.restoring fairness in dsh allotments. section 1923(f)(7) of the social security act (42 u.s.c. 1396r-4(f)(7)) is amended by
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adding at the end the following new subparagraph: "(c) non-expansion states. "(i) in general. in the case of a state that is a non-expansion state for a fiscal year "(i)subparagraph (a) shall not apply to the dsh allotment for such state and fiscal year; and "(ii)the dsh allotment for the state for fiscal year 2020 (including for a non-expansion state that has a dsh allotment determined under paragraph (6)) shall be increased by the amount calculated according to clause (iii). "(ii)no change in reduction for expansion states. in the case of a state that is an expansion state for a fiscal year, the dsh allotment for such state and fiscal year shall be determined as if clause (i) did not apply. "(iii)amount calculated.
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for purposes of clause (i)(ii), the amount calculated according to this clause for a non-expansion state is the following: "(i)for each state, the secretary shall calculate a ratio equal to the state's fiscal year 2016 dsh allotment divided by the number of uninsured individuals in the state for such fiscal year most recent information available from the bureau of the census). "(ii) the secretary shall identify the states whose ratio as so determined is below the national average of such ratio for all states. "(iii) the amount calculated pursuant to this clause is an amount that, if added to the state's fiscal year 2016 dsh allotment, would increase the ratio calculated pursuant to subclause (i) up to the national average for all states. "(iv) disregard of increase.
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the dsh allotment for a non-expansion state for the second, third, and fourth quarters of fiscal year 2024 and fiscal years thereafter shall be determined as if there had been no increase in the state's dsh allotment for fiscal year 2020 under clause (i)(ii). "(v) non-expansion and expansion state defined. in in this subparagraph: "(i) the term 'expansion state' means with respect to a fiscal year, a state that, on or after january 1, 2021, provides eligibility under subclause (xxiii) of section 1902(a)(10)(a)(ii) for medical assistance under this title (or provides eligibility for individuals described in such subclause under a waiver of the state plan approved under section 1115). "(ii) the term 'non-expansion
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state' means, with respect to a fiscal year, a state that is not an expansion state, except that- "(aa) in the case of a state that provides eligibility under clause (i)(viii), (ii)(xx), or (ii)(xxiii) of section 1902(a)(10)(a) for medical assistance under this title (or provides eligibility for individuals described in any of such clauses under a waiver of the state plan approved under section 1115) for any quarter occurring during the period that begins on october 1, 2017, and ends on december 31, 2020 the state shall be treated as a non-expansion state for purposes of clause (i) only for quarters beginning on or after the first day of the first month for which the state no longer provides such eligibility; and "(bb) in the case of a state identified by the secretary under clause (iii)(ii) that is a non-expansion state on january 1, 2021, but which provided such
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eligibility on january 1, 2020, the dsh allotment for such state for each of fiscal years 2021 through 2023 and the first fiscal quarter of 2024 shall be determined as if the state's dsh allotment for fiscal year 2020 had been increased under clause (i)(ii)." section 127, reducing state medicaid costs. (a)in general.- (1)state plan requirements.-section 1902(a)(34) of the social security act (42 u.s.c. 1396a(a)(34)) is amended by striking "in or after the third month" and all that follows through "individual)" and inserting "in or after the month in which the individual (or, in the case of a deceased individual, another individual acting on the individual's behalf) made application (or, in
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the case of an individual who is 65 years of age or older or who is eligible for medical assistance under the plan on the basis of being blind or disabled, in or after the third month before such month)". (2)definition of medical assistance.-section 1905(a) of the social security act (42 u.s.c. 1396d(a)) is amended by striking "in or after the third month before the month in which the recipient makes application for assistance" and inserting "in or after the month in which the recipient makes application for assistance, or, in the case of a recipient who is 65 years of age or older or who is eligible for medical assistance on the basis of being blind or disabled at the time application is made, in or after the third month before the month in which the recipient makes application for assistance,". (b)effective date.-the
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amendments made by subsection (a) shall apply to medical assistance with respect to individuals whose eligibility for such assistance is based on an application for such assistance made (or deemed to be made) on or after october 1, 2017. sec.128.providing safety net funding for non-expansion states. title xix of the social security act is amended by inserting after section 1923 (42 u.s.c. 1396r-4) the following new section: "adjustment in payment for services of safety net providers in non-expansion states "sec.1923a.(a)in general.-subject to the limitations of this section, for each year during the period beginning with fiscal year 2018 and ending with fiscal year 2022, each state that is one of the 50 states or the district of
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columbia and that, as of july 1 of the preceding fiscal year, did not provide for eligibility under clause (i)(viii), (ii)(xx), or (ii)(xxiii) of section 1902(a)(10)(a) for medical assistance under this title (or a waiver of the state plan approved under section 1115) (each such state or district referred to in this section for the fiscal year as a 'non-expansion state') may adjust the payment amounts otherwise provided under the state plan under this title (or a waiver of such plan) to health care providers that provide health care services to individuals enrolled under this title (in this section referred to as 'eligible providers') so long as the payment adjustment to such an eligible provider does not exceed the provider's costs in furnishing health care services (as determined by the secretary and net of payments under this title, other than under this section, and by
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uninsured patients) to individuals who either are eligible for medical assistance under the state plan (or under a waiver of such plan) or have no health insurance or health plan coverage for such services. "(b)increase in applicable fmap.-notwithstanding section 1905(b), the federal medical assistance percentage applicable with respect to expenditures attributable to a payment adjustment under subsection (a) for which payment is permitted under subsection (c) shall be equal to- "(1)100 percent for calendar quarters in fiscal years 2018, 2019, 2020, and 2021; and "(2)95 percent for calendar quarters in fiscal year 2022. "(c)annual allotment limitation.-payment under section 1903(a) shall not be made to a state with respect to
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any payment adjustment made under this section for all calendar quarters in a fiscal year in excess of the product of $2,000,000,000 multiplied by the ratio of- "(1)the population of the state with income below 138 percent of the poverty line in 2015 (as determined based the table entitled 'health insurance coverage status and type by ratio of income to poverty level in the past 12 months by age' for the universe of the civilian noninstitutionalized population for whom poverty status is determined based on the 2015 american community survey 1-year estimates, as published by the bureau of the census), to "(2)the sum of the populations under paragraph (1) for all non-expansion states. "(d)disqualification in case of state coverage expansion.-if a
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state is a non-expansion for a fiscal year and provides eligibility for medical assistance described in subsection (a) during the fiscal year, the state shall no longer be treated as a non-expansion state under this section for any subsequent fiscal years.". sec.129.eligibility redeterminations. (a)in general.-section 1902(e)(14) of the social security act (42 u.s.c. 1396a(e)(14)) (relating to modified adjusted gross income) is amended by adding at the end the following: "(j)frequency of eligibility redeterminations.-beginning on october 1, 2017, and notwithstanding subparagraph (h), in the case of an individual whose eligibility for medical assistance under the state plan under this title (or a waiver of such plan) is determined based on the
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application of modified adjusted gross income under subparagraph (a) and who is so eligible on the basis of clause (i)(viii), (ii)(xx), or (ii)(xxiii) of subsection (a)(10)(a), at the option of the state, the state plan may provide that the individual's eligibility shall be redetermined every 6 months (or such shorter number of months as the state may elect).". (b)increased administrative matching percentage.-for each calendar quarter during the period beginning on october 1, 2017, and ending on december 31, 2019, the federal matching percentage otherwise applicable under section 1903(a) of the social security act (42 u.s.c. 1396b(a)) with respect to state expenditures during such quarter that are attributable to meeting the requirement of section
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1902(e)(14) (relating to determinations of eligibility using modified adjusted gross income) of such act shall be increased by 5 percentage points with respect to state expenditures attributable to activities carried out by the state (and approved by the secretary) to exercise the option described in subparagraph (j) of such section (relating to eligibility redeterminations made on a 6-month or shorter basis) (as added by subsection (a)) to increase the frequency of eligibility redeterminations. sec.130.optional work requirement for nondisabled, nonelderly, nonpregnant individuals. (a)in general.-section 1902 of the social security act (42 u.s.c. 1396a), as previously amended, is further amended by adding at the end the following
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new subsection: "(oo)optional work requirement for nondisabled, nonelderly, nonpregnant individuals.- "(1)in general.-beginning october 1, 2017, subject to paragraph (3), a state may elect to condition medical assistance to a nondisabled, nonelderly, nonpregnant individual under this title upon such an individual's satisfaction of a work requirement (as defined in paragraph (2)). "(2)work requirement defined.-in this section, the term 'work requirement' means, with respect to an individual, the individual's participation in work activities (as defined in section 407(d)) for such period of time as determined by the state, and as directed and administered by the state. "(3)required exceptions.-states administering a work requirement under this subsection may not
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apply such requirement to- "(a)a woman during pregnancy through the end of the month in which the 60-day period (beginning on the last day of her pregnancy) ends; "(b)an individual who is under 19 years of age; "(c)an individual who is the only parent or caretaker relative in the family of a child who has not attained 6 years of age or who is the only parent or caretaker of a child with disabilities; or "(d)an individual who is married or a head of household and has not attained 20 years of age and who- "(i)maintains satisfactory attendance at secondary school or the equivalent; or "(ii)participates in education directly related to employment.". (b)increase in matching rate for implementation.-section 1903 of the social security act (42 u.s.c. 1396b) is amended by adding at the end the following:
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"(aa)the federal matching percentage otherwise applicable under subsection (a) with respect to state administrative expenditures during a calendar quarter for which the state receives payment under such subsection shall, in addition to any other increase to such federal matching percentage, be increased for such calendar quarter by 5 percentage points with respect to state expenditures attributable to activities carried out by the state (and approved by the secretary) to implement subsection (oo) of section 1902.". sec.131.provider taxes. section 1903(w)(4)(c) of the social security act (42 u.s.c. 1396b(w)(4)(c)) is amended by adding at the end the following new clause:
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"(iii)for purposes of clause (i), a determination of the existence of an indirect guarantee shall be made under paragraph (3)(i) of section 433.68(f) of title 42, code of federal regulations, as in effect on june 1, 2017, except that- "(i)for fiscal year 2021, '5.8 percent' shall be substituted for '6 percent' each place it appears; "(ii)for fiscal year 2022, '5.6 percent' shall be substituted for '6 percent' each place it appears; "(iii)for fiscal year 2023, '5.4 percent' shall be substituted for '6 percent' each place it appears; "(iv)for fiscal year 2024, '5.2 percent' shall be substituted for '6 percent' each place it appears; and "(v)for fiscal year 2025 and
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each subsequent fiscal year, '5 percent' shall be substituted for '6 percent' each place it appears.". sec.132.per capita allotment for medical assistance. (a)in general.-title xix of the social security act is amended- (1)in section 1903 (42 u.s.c. 1396b)- (a)in subsection (a), in the matter before paragraph (1), by inserting "and section 1903a(a)" after "except as otherwise provided in this section"; and (b)in subsection (d)(1), by striking "to which" and inserting "to which, subject to section 1903a(a),"; and (2)by inserting after such section 1903 the following new section: "sec.1903a.per capita-based cap on payments for medical assistance. "(a)application of per capita cap on payments for medical
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assistance expenditures.- "(1)in general.-if a state which is one of the 50 states or the district of columbia has excess aggregate medical assistance expenditures (as defined in paragraph (2)) for a fiscal year (beginning with fiscal year 2020), the amount of payment to the state under section 1903(a)(1) for each quarter in the following fiscal year shall be reduced by ® of the excess aggregate medical assistance payments (as defined in paragraph (3)) for that previous fiscal year. in this section, the term 'state' means only the 50 states and the district of columbia. "(2)excess aggregate medical assistance expenditures.-in this subsection, the term 'excess aggregate medical assistance expenditures' means, for a state for a fiscal year, the amount (if any) by which- "(a)the amount of the adjusted total medical assistance expenditures (as defined in subsection (b)(1)) for the state
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and fiscal year; exceeds "(b)the amount of the target total medical assistance expenditures (as defined in subsection (c)) for the state and fiscal year. "(3)excess aggregate medical assistance payments.-in this subsection, the term 'excess aggregate medical assistance payments' means, for a state for a fiscal year, the product of- "(a)the excess aggregate medical assistance expenditures (as defined in paragraph (2)) for the state for the fiscal year; and "(b)the federal average medical assistance matching percentage (as defined in paragraph (4)) for the state for the fiscal year. "(4)federal average medical assistance matching percentage.-in this subsection, the term 'federal average medical assistance matching percentage' means, for a state for a fiscal year, the ratio
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for the fiscal year. federal matching assistance percentage. in this subsection, the term federal average medical assistance matching percentage means for a state for a fiscal year the ratio (expressed as a percentage) of- -- if paragraph 1 did not apply to, b, the amount of the medical assistance expenditures for the state and fiscal year. "(5)per capita base period.- "(a)in general.-in this section, the term 'per capita base period' means, with respect to a state, a period of 8 (or, in the case of a state selecting a period under subparagraph (d), not less than 4) consecutive
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fiscal quarters selected by the state. "(b)timeline.-each state shall submit its selection of a per capita base period to the secretary not later than january 1, 2018. "(c)parameters.-in selecting a per capita base period under this paragraph, a state shall- "(i)only select a period of 8 (or, in the case of a state selecting a base period under subparagraph (d), not less than 4) consecutive fiscal quarters for which all the data necessary to make determinations required under this section is available, as determined by the secretary; and "(ii)shall not select any period of 8 (or, in the case of a state selecting a base period under subparagraph (d), not less than 4) consecutive fiscal quarters that begins with a fiscal quarter earlier than the first quarter of fiscal year 2014 or ends with a fiscal quarter later than the third fiscal quarter of 2017. "(d)base period for
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late-expanding states.- "(i)in general.-in the case of a state that did not provide for medical assistance for the 1903a enrollee category described in subsection (e)(2)(d) as of the first day of the fourth fiscal quarter of fiscal year 2015 but which provided for such assistance for such category in a subsequent fiscal quarter that is not later than the fourth quarter of fiscal year 2016, the state may select a per capita base period that is less than 8 consecutive fiscal quarters, but in no case shall the period selected be less than 4 consecutive fiscal quarters. "(ii)application of other requirements.-except for the requirement that a per capita base period be a period of 8 consecutive fiscal quarters, all other requirements of this paragraph shall apply to a per capita base period selected under this subparagraph. "(iii)application of base period adjustments.-the adjustments to amounts for per capita base periods required under
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subsections (b)(5) and (d)(4)(e) shall be applied to amounts for per capita base periods selected under this subparagraph by substituting 'divided by the ratio that the number of quarters in the base period bears to 4' for 'divided by 2'. "(e)adjustment by the secretary.-if the secretary determines that a state took actions after the date of enactment of this section (including making retroactive adjustments to supplemental payment data in a manner that affects a fiscal quarter in the per capita base period) to diminish the quality of the data from the per capita base period used to make determinations under this section, the secretary may adjust the data as the secretary deems appropriate. "(b)adjusted total medical assistance expenditures.-subject to subsection (g), the following shall apply: "(1)in general.-in this section, the term 'adjusted total medical assistance expenditures' means, for a state-
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"(a)for the state's per capita base period (as defined in subsection (a)(5)), the product of- "(i)the amount of the medical assistance expenditures (as defined in paragraph (2) and adjusted under paragraph (5)) for the state and period, reduced by the amount of any excluded expenditures (as defined in paragraph (3) and adjusted under paragraph (5)) for the state and period otherwise included in such medical assistance expenditures; and "(ii)the 1903a base period population percentage (as defined in paragraph (4)) for the state; or "(b)for fiscal year 2019 or a subsequent fiscal year, the amount of the medical assistance expenditures (as defined in paragraph (2)) for the state and fiscal year that is attributable to 1903a enrollees, reduced by the amount of any excluded expenditures (as defined in paragraph (3)) for the state and fiscal year otherwise included in such medical assistance expenditures and includes non-dsh supplemental payments (as defined in subsection (d)(4)(a)(ii)) and payments
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described in subsection (d)(4)(a)(iii) but shall not be construed as including any expenditures attributable to the program under section 1928 (relating to state pediatric vaccine distribution programs). in applying subparagraph (b), non-dsh supplemental payments (as defined in subsection (d)(4)(a)(ii)) and payments described in subsection (d)(4)(a)(iii) shall be treated as fully attributable to 1903a enrollees. "(2)medical assistance expenditures.-in this section, the term 'medical assistance expenditures' means, for a state and fiscal year or per capita base period, the medical assistance payments as reported by medical service category on the form cms-64 quarterly expense report (or successor to such a report form, and including enrollment data and subsequent adjustments to any such report, in this section referred to collectively as a 'cms-64 report') for quarters in
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the year or base period for which payment is (or may otherwise be) made pursuant to section 1903(a)(1), adjusted, in the case of a per capita base period, under paragraph (5). "(3)excluded expenditures.-in this section, the term 'excluded expenditures' means, for a state and fiscal year or per capita base period, expenditures under the state plan (or under a waiver of such plan) that are attributable to any of the following: "(a)dsh.-payment adjustments made for disproportionate share hospitals under section 1923. "(b)medicare cost-sharing.-payments made for medicare cost-sharing (as defined in section 1905(p)(3)). "(c)safety net provider payment adjustments in non-expansion states.-payment adjustments under subsection (a) of section 1923a for which payment is permitted under subsection (c) of such section. "(d)expenditures for public health emergencies.-any
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expenditures that are subject to a public health emergency exclusion under paragraph (6). "(4)1903a base period population percentage.-in this subsection, the term '1903a base period population percentage' means, for a state, the secretary's calculation of the percentage of the actual medical assistance expenditures, as reported by the state on the cms-64 reports for calendar quarters in the state's per capita base period, that are attributable to 1903a enrollees (as defined in subsection (e)(1)). "(5)adjustments for per capita base period.-in calculating medical assistance expenditures under paragraph (2) and excluded expenditures under paragraph (3) for a state for the state's per capita base period, the total amount of each type of expenditure for the state and base period shall be divided by 2. "(6)authority to exclude state expenditures from caps during public health emergency.- "(a)in general.-during the period that begins on january 1,
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2020, and ends on december 31, 2024, the secretary may exclude, from a state's medical assistance expenditures for a fiscal year or portion of a fiscal year that occurs during such period, an amount that shall not exceed the amount determined under subparagraph (b) for the state and year or portion of a year if- "(i)a public health emergency declared by the secretary pursuant to section 319 of the public health service act existed within the state during such year or portion of a year; and "(ii)the secretary determines that such an exemption would be appropriate. "(b)maximum amount of adjustment.-the amount excluded for a state and fiscal year or portion of a fiscal year under this paragraph shall not exceed the amount by which- "(i)the amount of state expenditures for medical assistance for 1903a enrollees in areas of the state which are subject to a declaration described in subparagraph (a)(i) for the fiscal year or portion of a fiscal year; exceeds "(ii)the amount of such expenditures for such enrollees
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in such areas during the most recent fiscal year or portion of a fiscal year of equal length to the portion of a fiscal year involved during which no such declaration was in effect. "(c)aggregate limitation on exclusions and additional block grant payments.-the aggregate amount of expenditures excluded under this paragraph and additional payments made under section 1903b(c)(3)(e) for the period described in subparagraph (a) shall not exceed $5,000,000,000. "(d)review.-if the secretary exercises the authority under this paragraph with respect to a state for a fiscal year or portion of a fiscal year, the secretary shall, not later than 6 months after the declaration described in subparagraph (a)(i) ceases to be in effect, conduct an audit of the state's medical assistance expenditures for 1903a enrollees during the year or portion of a year to ensure that all of the expenditures so excluded were made for the purpose of ensuring that the health care needs of 1903a
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enrollees in areas affected by a public health emergency are met. "(c) target total medical assistance expenditures.- "(1)calculation.-in this section, the term 'target total medical assistance expenditures' means, for a state for a fiscal year and subject to paragraph (4), the sum of the products, for each of the 1903a enrollee categories (as defined in subsection (e)(2)), of- "(a)the target per capita medical assistance expenditures (as defined in paragraph (2)) for the enrollee category, state, and fiscal year; and "(b)the number of 1903a enrollees for such enrollee category, state, and fiscal year, as determined under subsection (e)(4). "(2)target per capita medical assistance expenditures.-in this subsection, the term 'target per capita medical assistance expenditures' means, for a 1903a enrollee category and state- "(a)for fiscal year 2020, an
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amount equal to- "(i)the provisional fy19 target per capita amount for such enrollee category (as calculated under subsection (d)(5)) for the state; increased by "(ii)the applicable annual inflation factor (as defined in paragraph (3)) for fiscal year 2020; and "(b)for each succeeding fiscal year, an amount equal to- "(i)the target per capita medical assistance expenditures (under subparagraph (a) or this subparagraph) for the 1903a enrollee category and state for the preceding fiscal year; increased by "(ii)the applicable annual inflation factor for that succeeding fiscal year. "(3)applicable annual inflation factor.-in paragraph (2), the term 'applicable annual inflation factor' means- "(a)for fiscal years before 2025- "(i)for each of the 1903a enrollee categories described in subparagraphs (c), (d), and (e) of subsection (e)(2), the percentage increase in the medical care component of the consumer price index for all
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urban consumers (u.s. city average) from september of the previous fiscal year to september of the fiscal year involved; and "(ii)for each of the 1903a enrollee categories described in subparagraphs (a) and (b) of subsection (e)(2), the percentage increase described in clause (i) plus 1 percentage point; and "(b)for fiscal years after 2024, for all 1903a enrollee categories, the percentage increase in the consumer price index for all urban consumers (u.s. city average) from september of the previous fiscal year to september of the fiscal year involved. "(4)decrease in target expenditures for required expenditures by certain political subdivisions.- "(a)in general.-in the case of a state that had a dsh allotment under section 1923(f) for fiscal year 2016 that was more than 6 times the national average of such allotments for all the states for such fiscal year and that requires political subdivisions within the state to
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contribute funds towards medical assistance or other expenditures under the state plan under this title (or under a waiver of such plan) for a fiscal year (beginning with fiscal year 2020), the target total medical assistance expenditures for such state and fiscal year shall be decreased by the amount that political subdivisions in the state are required to contribute under the plan (or waiver) without reimbursement from the state for such fiscal year, other than contributions described in subparagraph (b). "(b)exceptions. the contributions described in this subparagraph are the following: "(i)contributions required by a state from a political subdivision that, as of the first day of the calendar year in which the fiscal year involved begins "(i)has a population of more than 5,000,000, as estimated by the bureau of the census; and "(ii)imposes a local income tax upon its residents. "(ii)contributions required by a state from a political subdivision for administrative expenses if the state required such contributions from such
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subdivision without reimbursement from the state as of january 1, 2017. "(5)adjustments to state expenditures targets to promote program equity across states. "(a)in general. beginning with fiscal year 2020, the target per capita medical assistance expenditures for a 1903a enrollee category, state, and fiscal year, as determined under paragraph (2), shall be adjusted (subject to subparagraph (c)(i)) in accordance with this paragraph. "(b)adjustment based on level of per capita spending for 1903a enrollee categories.-subject to subparagraph (c), with respect to a state, fiscal year, and 1903a enrollee category, if the state's per capita categorical medical assistance expenditures (as defined in subparagraph (d)) for the state and category in the preceding fiscal year- "(i)exceed the mean per capita categorical medical assistance expenditures for the category for all states for such preceding year by not less than
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25 percent, the state's target per capita medical assistance expenditures for such category for the fiscal year involved shall be reduced by a percentage that shall be determined by the secretary but which shall not be less than 0.5 percent or greater than 3 percent; or "(ii)are less than the mean per capita categorical medical assistance expenditures for the category for all states for such preceding year by not less than 25 percent, the state's target per capita medical assistance expenditures for such category for the fiscal year involved shall be increased by a percentage that shall be determined by the secretary but which shall not be less than 0.5 percent or greater than 3 percent. "(c)rules of application. "(i)budget neutrality requirement.-in determining the appropriate percentages by which to adjust states' target per capita medical assistance expenditures for a category and fiscal year under this
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paragraph, the secretary shall make such adjustments in a manner that does not result in a net increase in federal payments under this section for such fiscal year, and if the secretary cannot adjust such expenditures in such a manner there shall be no adjustment under this paragraph for such fiscal year. "(ii)assumption regarding state expenditures.-for purposes of clause (i), in the case of a state that has its target per capita medical assistance expenditures for a 1903a enrollee category and fiscal year increased under this paragraph, the secretary shall assume that the categorical medical assistance expenditures (as defined in subparagraph (d)(ii)) for such state, category, and fiscal year will equal such increased target medical assistance expenditures. "(iii) nonapplication to low-density states.-this paragraph shall not apply to any state that has a population density of less than 15 individuals per square mile, based on the most recent data available from the bureau of the
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census. "(iv)disregard of adjustment. any adjustment under this paragraph to target medical assistance expenditures for a state, 1903a enrollee category, and fiscal year shall be disregarded when determining the target medical assistance expenditures for such state and category for a succeeding year under paragraph (2). "(v)application for fiscal years 2020 and 2021. in fiscal years 2020 and 2021, the secretary shall apply this paragraph by deeming all categories of 1903a enrollees to be a single category. "(d)per capita categorical medical assistance expenditures. "(i)in general. in this paragraph, the term 'per capita categorical medical assistance expenditures' means, with respect to a state, 1903a enrollee category, and fiscal year, an amount equal to- "(i)the categorical medical expenditures (as defined in
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clause (ii)) for the state, category, and year; divided by "(ii)the number of 1903a enrollees for the state, category, and year. "(ii)categorical medical assistance expenditures.-the term 'categorical medical assistance expenditures' means, with respect to a state, 1903a enrollee category, and fiscal year, an amount equal to the total medical assistance expenditures (as defined in paragraph (2)) for the state and fiscal year that are attributable to 1903a enrollees in the category, excluding any excluded expenditures (as defined in paragraph (3)) for the state and fiscal year that are attributable to 1903a enrollees in the category. "(d)calculation of fy19 provisional target amount for each 1903a enrollee category.-subject to subsection (g), the following shall apply:
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"(1)calculation of base amounts for per capita base period. for each state the secretary shall calculate (and provide notice to the state not later than april 1, 2018, of) the following: "(a)the amount of the adjusted total medical assistance expenditures (as defined in subsection (b)(1)) for the state for the state's per capita base period. "(b)the number of 1903a enrollees for the state in the state's per capita base period (as determined under subsection (e)(4)). "(c)the average per capita medical assistance expenditures for the state for the state's per capita base period equal to "(i)the amount calculated under subparagraph (a); divided by "(ii)the number calculated under subparagraph (b). "(2)fiscal year 2019 average per capita amount based on inflating the per capita base period amount to fiscal year 2019 by cpi-medical.-the secretary shall calculate a fiscal year 2019
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average per capita amount for each state equal to- "(a)the average per capita medical assistance expenditures for the state for the state's per capita base period (calculated under paragraph (1)(c)); increased by "(b)the percentage increase in the medical care component of the consumer price index for all urban consumers (u.s. city average) from the last month of the state's per capita base period to september of fiscal year 2019. "(3)aggregate and average expenditures per capita for fiscal year 2019.-the secretary shall calculate for each state the following: "(a)the amount of the adjusted total medical assistance expenditures (as defined in subsection (b)(1)) for the state for fiscal year 2019. "(b)the number of 1903a enrollees for the state in fiscal year 2019 (as determined under subsection (e)(4)). "(4)per capita expenditures for fiscal year 2019 for each 1903a enrollee category.-the secretary
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shall calculate (and provide notice to each state not later than january 1, 2020, of) the following: "(a)(i)for each 1903a enrollee category, the amount of the adjusted total medical assistance expenditures (as defined in subsection (b)(1)) for the state for fiscal year 2019 for individuals in the enrollee category, calculated by excluding from medical assistance expenditures those expenditures attributable to expenditures described in clause (iii) or non-dsh supplemental expenditures (as defined in clause (ii)). "(ii)in this paragraph, the term 'non-dsh supplemental expenditure' means a payment to a provider under the state plan (or under a waiver of the plan) that "(i)is not made under section 1923; "(ii)is not made with respect to a specific item or service for an individual; "(iii)is in addition to any payments made to the provider under the plan (or waiver) for any such item or service; and
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"(iv)complies with the limits for additional payments to providers under the plan (or waiver) imposed pursuant to section 1902(a)(30)(a), including the regulations specifying upper payment limits under the state plan in part 447 of title 42, code of federal regulations (or any successor regulations). "(iii)an expenditure described in this clause is an expenditure that meets the criteria specified in subclauses (i), (ii), and (iii) of clause (ii) and is authorized under section 1115 for the purposes of funding a delivery system reform pool, uncompensated care pool, a designated state health program, or any other similar expenditure (as defined by the secretary). "(b)for each 1903a enrollee category, the number of 1903a enrollees for the state in fiscal year 2019 in the enrollee category (as determined under subsection (e)(4)). "(c)for the state's per capita base period, the state's non-dsh
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supplemental and pool payment percentage is equal to the ratio (expressed as a percentage) of "(i)the total amount of non-dsh supplemental expenditures (as defined in subparagraph (a)(ii) and adjusted under subparagraph (e)) and payments described in subparagraph (a)(iii) (and adjusted under subparagraph (e)) for the state for the period; to "(ii)the amount described in subsection (b)(1)(a) for the state for the state's per capita base period. "(d)for each 1903a enrollee category an average medical assistance expenditures per capita for the state for fiscal year 2019 for the enrollee category equal to "(i)the amount calculated under subparagraph (a) for the state, increased by the non-dsh supplemental and pool payment percentage for the state (as calculated under subparagraph (c)); divided by "(ii)the number calculated under subparagraph (b) for the state
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for the enrollee category. "(e)for purposes of subparagraph (c)(i), in calculating the total amount of non-dsh supplemental expenditures and payments described in subparagraph (a)(iii) for a state for the per capita base period, the total amount of such expenditures and the total amount of such payments for the state and base period shall each be divided by two. "(5)provisional fy19 per capita target amount for each 1903a enrollee category. subject to subsection (f)(2), the secretary shall calculate for each state a provisional fy19 per capita target amount for each 1903a enrollee category equal to the average medical assistance expenditures per capita for the state for fiscal year 2019 (as calculated under paragraph (4)(d)) for such enrollee category multiplied by the ratio of "(a)the product of "(i)the fiscal year 2019 average per capita amount for the state, as calculated under paragraph
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(2); and "(ii)the number of 1903a enrollees for the state in fiscal year 2019, as calculated under paragraph (3)(b); to "(b)the amount of the adjusted total medical assistance expenditures for the state for fiscal year 2019, as calculated under paragraph (3)(a). "(e)1903a enrollee; 1903a enrollee category. subject to subsection (g), for purposes of this section, the following shall apply: "(1)1903a enrollee. the term '1903a enrollee' means, with respect to a state and a month and subject to subsection (i)(1)(b), any medicaid enrollee (as defined in paragraph (3)) for the month, other than such an enrollee who for such month is in any of the following categories of excluded individuals: "(a)chip.-an individual who is provided, under this title in the manner described in section 2101(a)(2), child health
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assistance under title xxi. "(b)ihs.-an individual who receives any medical assistance under this title for services for which payment is made under the third sentence of section 1905(b). "(c)breast and cervical cancer services eligible individual.-an individual who is eligible for medical assistance under this title only on the basis of section 1902(a)(10)(a)(ii)(xviii). "(d)partial-benefit enrollees.-an individual who- "(i)is an alien who is eligible for medical assistance under this title only on the basis of section 1903(v)(2); "(ii)is eligible for medical assistance under this title only on the basis of subclause (xii) or (xxi) of section 1902(a)(10)(a)(ii) (or on the basis of a waiver that provides only comparable benefits); "(iii)is a dual eligible individual (as defined in
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section 1915(h)(2)(b)) and is eligible for medical assistance under this title (or under a waiver) only for some or all of medicare cost-sharing (as defined in section 1905(p)(3)); or "(iv)is eligible for medical assistance under this title and for whom the state is providing a payment or subsidy to an employer for coverage of the individual under a group health plan pursuant to section 1906 or section 1906a (or pursuant to a waiver that provides only comparable benefits). "(e)blind and disabled children.-an individual who- "(i)is a child under 19 years of age; and "(ii)is eligible for medical assistance under this title on the basis of being blind or disabled. "(2)1903a enrollee category.-the term '1903a enrollee category' means each of the following: "(a)elderly.-a category of 1903a enrollees who are 65 years of age or older.
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"(b)blind and disabled.-a category of 1903a enrollees (not described in the previous subparagraph) who- "(i)are 19 years of age or older; and "(ii)are eligible for medical assistance under this title on the basis of being blind or disabled. "(c)children.-a category of 1903a enrollees (not described in a previous subparagraph) who are children under 19 years of age. "(d)expansion enrollees.-a category of 1903a enrollees (not described in a previous subparagraph) who are eligible for medical assistance under this title only on the basis of clause (i)(viii), (ii)(xx), or (ii)(xxiii) of section 1902(a)(10)(a). "(e)other nonelderly, nondisabled, non-expansion adults.-a category of 1903a enrollees who are not described in any previous subparagraph. "(3)medicaid enrollee.-the term 'medicaid enrollee' means, with respect to a state for a month,
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an individual who is eligible for medical assistance for items or services under this title and enrolled under the state plan (or a waiver of such plan) under this title for the month. "(4)determination of number of 1903a enrollees.-the number of 1903a enrollees for a state and fiscal year or the state's per capita base period, and, if applicable, for a 1903a enrollee category, is the average monthly number of medicaid enrollees for such state and fiscal year or base period (and, if applicable, in such category) that are reported through the cms-64 report under (and subject to audit under) subsection (h). "(f)special payment rules.- "(1)application in case of research and demonstration projects and other waivers.-in the case of a state with a waiver of the state plan approved under section 1115, section 1915, or another provision of this title, this section shall apply to medical
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assistance expenditures and medical assistance payments under the waiver, in the same manner as if such expenditures and payments had been made under a state plan under this title and the limitations on expenditures under this section shall supersede any other payment limitations or provisions (including limitations based on a per capita limitation) otherwise applicable under such a waiver. "(2)treatment of states expanding coverage after july 1, 2016.-in the case of a state that did not provide for medical assistance for the 1903a enrollee category described in subsection (e)(2)(d) as of july 1, 2016, but which subsequently provides for such assistance for such category, the provisional fy19 per capita target amount for such enrollee category under subsection (d)(5) shall be equal to the provisional fy19 per capita target amount for the 1903a enrollee category described in subsection
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(e)(2)(e). "(3)in case of state failure to report necessary data.-if a state for any quarter in a fiscal year (beginning with fiscal year 2019) fails to satisfactorily submit data on expenditures and enrollees in accordance with subsection (h)(1), for such fiscal year and any succeeding fiscal year for which such data are not satisfactorily submitted- "(a)the secretary shall calculate and apply subsections (a) through (e) with respect to the state as if all 1903a enrollee categories for which such expenditure and enrollee data were not satisfactorily submitted were a single 1903a enrollee category; and "(b)the growth factor otherwise applied under subsection (c)(2)(b) shall be decreased by 1 percentage point. "(g)recalculation of certain amounts for data errors.-the amounts and percentage calculated under paragraphs (1) and (4)(c) of subsection (d) for a state for the state's per capita base period, and the
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amounts of the adjusted total medical assistance expenditures calculated under subsection (b) and the number of medicaid enrollees and 1903a enrollees determined under subsection (e)(4) for a state for the state's per capita base period, fiscal year 2019, and any subsequent fiscal year, may be adjusted by the secretary based upon an appeal (filed by the state in such a form, manner, and time, and containing such information relating to data errors that support such appeal, as the secretary specifies) that the secretary determines to be valid, except that any adjustment by the secretary under this subsection for a state may not result in an increase of the target total medical assistance expenditures exceeding 2 percent. "(h)required reporting and auditing; transitional increase in federal matching percentage for certain administrative expenses.- "(1)reporting of cms-64 data.- "(a)in general.-in addition to
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the data required on form group viii on the cms-64 report form as of january 1, 2017, in each cms-64 report required to be submitted (for each quarter beginning on or after october 1, 2018), the state shall include data on medical assistance expenditures within such categories of services and categories of enrollees (including each 1903a enrollee category and each category of excluded individuals under subsection (e)(1)) and the numbers of enrollees within each of such enrollee categories, as the secretary determines are necessary (including timely guidance published as soon as possible after the date of the enactment of this section) in order to implement this section and to enable states to comply with the requirement of this paragraph on a timely basis. "(b)reporting on qualified inpatient psychiatric hospital services.-not later than 60 days after the date of the enactment of this section, the secretary shall modify the cms-64 report
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form to require that states submit data with respect to medical assistance expenditures for qualified inpatient psychiatric hospital services (as defined in section 1905(h)(3)). "(c)reporting on children with complex medical conditions.-not later than january 1, 2020, the secretary shall modify the cms-64 report form to require that states submit data with respect to individuals who- "(i)are enrolled in a state plan under this title or title xxi or under a waiver of such plan; "(ii)are under 21 years of age; and "(iii)have a chronic medical condition or serious injury that- "(i)affects two or more body systems; "(ii)affects cognitive or physical functioning (such as reducing the ability to perform the activities of daily living, including the ability to engage in movement or mobility, eat, drink, communicate, or breathe independently); and "(iii)either-
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"(aa)requires intensive healthcare interventions (such as multiple medications, therapies, or durable medical equipment) and intensive care coordination to optimize health and avoid hospitalizations or emergency department visits; or "(bb)meets the criteria for medical complexity under existing risk adjustment methodologies using a recognized, publicly available pediatric grouping system (such as the pediatric complex conditions classification system or the pediatric medical complexity algorithm) selected by the secretary in close collaboration with the state agencies responsible for administering state plans under this title and a national panel of pediatric, pediatric specialty, and pediatric subspecialty experts. "(2)auditing of cms-64 data.-the secretary shall conduct for each state an audit of the number of individuals and expenditures reported through the cms-64 report for the state's per
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capita base period, fiscal year 2019, and each subsequent fiscal year, which audit may be conducted on a representative sample (as determined by the secretary). "(3)auditing of state spending.-the inspector general of the department of health and human services shall conduct an audit (which shall be conducted using random sampling, as determined by the inspector general) of each state's spending under this section not less than once every 3 years. "(4)temporary increase in federal matching percentage to support improved data reporting systems for fiscal years 2018 and 2019.-in the case of any state that selects as its per capita base period the most recent 8 consecutive quarter period for which the data necessary to make the determinations required under this section is available, for amounts expended during calendar quarters beginning on or after october 1, 2017, and before october 1, 2019-
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"(a)the federal matching percentage applied under section 1903(a)(3)(a)(i) shall be increased by 10 percentage points to 100 percent; "(b)the federal matching percentage applied under section 1903(a)(3)(b) shall be increased by 25 percentage points to 100 percent; and "(c)the federal matching percentage applied under section 1903(a)(7) shall be increased by 10 percentage points to 60 percent but only with respect to amounts expended that are attributable to a state's additional administrative expenditures to implement the data requirements of paragraph (1). "(5)hhs report on adoption of t-msis data.-not later than january 1, 2025, the secretary shall submit to congress a report making recommendations as to whether data from the transformed medicaid statistical information system would be preferable to cms-64 report data for purposes of making the determinations necessary under
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this section.". (b)ensuring access to home and community based services.-section 1915 of the social security act (42 u.s.c. 1396n) is amended by adding at the end the following new subsection: "(l)incentive payments for home and community-based services.- "(1)in general.-the secretary shall establish a demonstration project (referred to in this subsection as the 'demonstration project') under which eligible states may make hcbs payment adjustments for the purpose of continuing to provide and improving the quality of home and community-based services provided under a waiver under subsection (c) or (d) or a state
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plan amendment under subsection (i). "(2)selection of eligible states.- "(a)application.-a state seeking to participate in the demonstration project shall submit to the secretary, at such time and in such manner as the secretary shall require, an application that includes- "(i)an assurance that any hcbs payment adjustment made by the state under this subsection will comply with the health and welfare and financial accountability safeguards taken by the state under subsection (c)(2)(a); and "(ii)such other information and assurances as the secretary shall require. "(b)selection.-the secretary shall select states to participate in the demonstration project on a competitive basis except that, in making selections under this paragraph, the secretary shall give priority to any state that is one of the 15 states in the united states with the lowest population density, as determined by the secretary based on data from the bureau of the census. "(3)term of demonstration
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project.-the demonstration project shall be conducted for the 4-year period beginning on january 1, 2020, and ending on december 31, 2023. "(4)state allotments and increased fmap for payment adjustments.- "(a)in general.- "(i)annual allotment.-subject to clause (ii), for each year of the demonstration project, the secretary shall allot an amount to each state that is an eligible state for the year. "(ii)limitation on federal spending.-the aggregate amount that may be allotted to eligible states under clause (i) for all years of the demonstration project shall not exceed $8,000,000,000, and in no case may the aggregate amount of payments made by the secretary to eligible states for payment adjustments under this subsection exceed such amount. "(b)payments to eligible states and limitations on payments.- "(i)in general.-subject to
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clauses (ii) and (iii), for each year of the demonstration project, notwithstanding section 1905(b), the federal medical assistance percentage applicable with respect to expenditures by an eligible state that are attributable to hcbs payment adjustments shall be equal to (and shall in no case exceed) 100 percent. "(ii)limitation on hcbs payment adjustments for individual providers.-payment under section 1903(a) shall not be made to an eligible state for expenditures for a year that are attributable to an hcbs payment adjustment that is paid to a single provider and exceeds a percentage which shall be established by the secretary of the payment otherwise made to the provider. "(iii)limitation of payment to amount of allotment.-payment under section 1903(a) shall not be made to an eligible state for expenditures for a year that are attributable to an hcbs payment adjustment to the extent that the aggregate amount of hcbs payment adjustments made by the
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state in the year exceeds the amount allotted to the state for the year under subparagraph (a)(i). "(5)reporting and evaluation.- "(a)in general.-as a condition of receiving the increased federal medical assistance percentage described in paragraph (4)(b)(i), each eligible state shall collect and report information, as determined necessary by the secretary, for the purposes of providing federal oversight and evaluating the state's compliance with the health and welfare and financial accountability safeguards taken by the state under subsection (c)(2)(a). "(b)forms.-expenditures by eligible states on hcbs payment adjustments shall be separately reported on the cms-64 form and in t-msis. "(6)definitions.-in this subsection: "(a)eligible state.-the term 'eligible state' means a state that- "(i)is one of the 50 states or the district of columbia; "(ii)has in effect-
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"(i)a waiver under subsection (c) or (d); or "(ii)a state plan amendment under subsection (i); "(iii)submits an application under paragraph (2)(a); and "(iv)is selected by the secretary to participate in the demonstration project. "(b)hcbs payment adjustment.-the term 'hcbs payment adjustment' means a payment adjustment made by an eligible state to the amount of payment otherwise provided under a waiver under subsection (c) or (d) or a state plan amendment under subsection (i) for a home and community-based service which is provided to a 1903a enrollee (as defined in section 1903a(e)(1)) who is in the enrollee category described in subparagraph (a) or (b) of section 1903a(e)(2).". sec.133.flexible block grant option for states. title xix of the social security act, as amended by section 132, is further amended by inserting after section 1903a the
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following new section: "sec.1903b.medicaid flexibility program. "(a)in general.-beginning with fiscal year 2020, any state (as defined in subsection (e)) that has an application approved by the secretary under subsection (b) may conduct a medicaid flexibility program to provide targeted health assistance to program enrollees. "(b)state application.- "(1)in general.-to be eligible to conduct a medicaid flexibility program, a state shall submit an application to the secretary that meets the requirements of this subsection. "(2)contents of application.-an application under this subsection shall include the following: "(a)a description of the proposed medicaid flexibility program and how the state will satisfy the requirements described in subsection (d). "(b)the proposed conditions for eligibility of program enrollees. "(c)the applicable program enrollee category (as defined in subsection (e)(1)). "(d)a description of the types,
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amount, duration, and scope of services which will be offered as targeted health assistance under the program, including a description of the proposed package of services which will be provided to program enrollees to whom the state would otherwise be required to make medical assistance available under section 1902(a)(10)(a)(i). "(e)a description of how the state will notify individuals currently enrolled in the state plan for medical assistance under this title of the transition to such program. "(f)statements certifying that the state agrees to- "(i)submit regular enrollment data with respect to the program to the centers for medicare & medicaid services at such time and in such manner as the secretary may require; "(ii)submit timely and accurate data to the transformed medicaid statistical information system (t-msis); "(iii)report annually to the secretary on adult health quality measures implemented under the program and
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information on the quality of health care furnished to program enrollees under the program as part of the annual report required under section 1139b(d)(1); "(iv)submit such additional data and information not described in any of the preceding clauses of this subparagraph but which the secretary determines is necessary for monitoring, evaluation, or program integrity purposes, including- "(i)survey data, such as the data from consumer assessment of healthcare providers and systems (cahps) surveys; "(ii)birth certificate data; and "(iii)clinical patient data for quality measurements which may not be present in a claim, such as laboratory data, body mass index, and blood pressure; and "(v)on an annual basis, conduct a report evaluating the program and make such report available to the public. "(g)an information technology systems plan demonstrating that the state has the capability to support the technological administration of the program and comply with reporting requirements under this section.
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"(h)a statement of the goals of the proposed program, which shall include- "(i)goals related to quality, access, rate of growth targets, consumer satisfaction, and outcomes; "(ii)a plan for monitoring and evaluating the program to determine whether such goals are being met; and "(iii)a proposed process for the state, in consultation with the centers for medicare & medicaid services, to take remedial action to make progress on unmet goals. "(i)such other information as the secretary may require. "(3)state notice and comment period.- "(a)in general.-before submitting an application under this subsection, a state shall make the application publicly available for a 30 day notice and comment period. "(b)notice and comment process.-during the notice and comment period described in subparagraph (a), the state shall provide opportunities for a meaningful level of public input, which shall include public hearings on the proposed medicaid flexibility program. "(4)federal notice and comment
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period.-the secretary shall not approve of any application to conduct a medicaid flexibility program without making such application publicly available for a 30 day notice and comment period. "(5)timeline for submission.- "(a)in general.-a state may submit an application under this subsection to conduct a medicaid flexibility program that would begin in the next fiscal year at any time, subject to subparagraph (b). "(b)deadlines.-each year beginning with 2019, the secretary shall specify a deadline for submitting an application under this subsection to conduct a medicaid flexibility program that would begin in the next fiscal year, but such deadline shall not be earlier than 60 days after the date that the secretary publishes the amounts of state block grants as required under subsection (c)(4). "(c)financing.- "(1)in general.-for each fiscal year during which a state is conducting a medicaid flexibility program, the state shall receive, instead of amounts otherwise payable to the state under this title for medical assistance for program enrollees, the amount specified
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in paragraph (3)(a). "(2)amount of block grant funds.- "(a)in general.-the block grant amount under this paragraph for a state and year shall be equal to the sum of the amounts determined under subparagraph (b) for each 1903a enrollee category within the applicable program enrollee category for the state and year. "(b)enrollee category amounts.- "(i)for initial year.-subject to subparagraph (c), for the first fiscal year in which a 1903a enrollee category is included in the applicable program enrollee category for a medicaid flexibility program conducted by the state, the amount determined under this subparagraph for the state, year, and category shall be equal to the federal average medical assistance matching percentage (as defined in section 1903a(a)(4)) for the state and year multiplied by the product of- "(i)the target per capita medical assistance expenditures
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(as defined in section 1903a(c)(2)) for the state, year, and category; and "(ii)the number of 1903a enrollees in such category for the state for the second fiscal year preceding such first fiscal year, increased by the percentage increase in state population from such second preceding fiscal year to such first fiscal year, based on the best available estimates of the bureau of the census. "(ii)for any subsequent year.-for any fiscal year that is not the first fiscal year in which a 1903a enrollee category is included in the applicable program enrollee category for a medicaid flexibility program conducted by the state, the block grant amount under this paragraph for the state, year, and category shall be equal to the amount determined for the state and category for the most recent previous fiscal year in which the state conducted a medicaid flexibility program that included such category, except that such amount shall be increased by the percentage increase in the consumer price index for all urban consumers (u.s. city average) from april
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of the second fiscal year preceding the fiscal year involved to april of the fiscal year preceding the fiscal year involved. "(c)cap on total population of 1903a enrollees for purposes of block grant calculation.- "(i)in general.-in calculating the amount of a block grant for the first year in which a 1903a enrollee category is included in the applicable program enrollee category for a medicaid flexibility program conducted by the state under subparagraph (b)(i), the total number of 1903a enrollees in such 1903a enrollee category for the state and year shall not exceed the adjusted number of base period enrollees for the state (as defined in clause (ii)). "(ii)adjusted number of base period enrollees.-the term 'adjusted number of base period enrollees' means, with respect to a state and 1903a enrollee category, the number of 1903a enrollees in the enrollee category for the state for the
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state's per capita base period (as determined under section 1903a(e)(4)), increased by the percentage increase, if any, in the total state population from the last april in the state's per capita base period to april of the fiscal year preceding the fiscal year involved (determined using the best available data from the bureau of the census) plus 3 percentage points. "(d)availability of rollover funds.- "(i)in general.-to the extent that the block grant amount available to a state for a fiscal year under this paragraph exceeds the amount of federal payments made to the state for such fiscal year under paragraph (3)(a), the secretary shall make such funds available to the state for the succeeding fiscal year if the state- "(i)satisfies the state maintenance of effort requirement under paragraph (3)(b); and "(ii)is conducting a medicaid flexibility program in such succeeding fiscal year. "(ii)use of funds.-funds made available to a state under this subparagraph shall only be used for expenditures related to the
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state plan under this title or to the state medicaid flexibility program. "(3)federal payment and state maintenance of effort.- "(a)federal payment.-subject to subparagraphs (d) and (e), the secretary shall pay to each state conducting a medicaid flexibility program under this section for a fiscal year, from its block grant amount under paragraph (2) for such year, an amount for each quarter of such year equal to the federal average medical assistance percentage (as defined in section 1903a(a)(4)) of the total amount expended under the program during such quarter as targeted health assistance, and the state is responsible for the balance of the funds to carry out such program. "(b)state maintenance of effort expenditures.-for each year during which a state is conducting a medicaid flexibility program, the state shall make expenditures for targeted health assistance under the program in an amount equal to the product of- "(i)the block grant amount determined for the state and
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year under paragraph (2); and "(ii)the enhanced fmap described in the first sentence of section 2105(b) for the state and year. "(c)reduction in block grant amount for states failing to meet moe requirement.- "(i)in general.-in the case of a state conducting a medicaid flexibility program that makes expenditures for targeted health assistance under the program fo a fiscal year in an amount that is less than the required amount for the fiscal year under subparagraph (b), the amount of the block grant determined for the state under paragraph (2) for the succeeding fiscal year shall be reduced by the amount by which such expenditures are less than such required amount. "(ii)disregard of reduction.-for purposes of determining the amount of a state block grant under paragraph (2), any reduction made under this subparagraph to a state's block grant amount in a previous fiscal year shall be disregarded. "(iii)application to states that terminate program.-in the case of a state described in clause
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(i) that terminates the state medicaid flexibility program under subsection (d)(2)(b) and such termination is effective with the end of the fiscal year in which the state fails to make the required amount of expenditures under subparagraph (b), the reduction amount determined for the state and succeeding fiscal year under clause (i) shall be treated as an overpayment under this title. "(d)reduction for noncompliance.-if the secretary determines that a state conducting a medicaid flexibility program is not complying with the requirements of this section, the secretary may withhold payments, reduce payments, or recover previous payments to the state under this section as the secretary deems appropriate. "(e)additional federal payments during public health emergency.- "(i)in general.-in the case of a state and fiscal year or portion of a fiscal year for which the secretary has excluded expenditures under section 1903a(b)(6), if the state has uncompensated targeted health assistance expenditures for the
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year or portion of a year, the secretary may make an additional payment to such state equal to the federal average medical assistance percentage (as defined in section 1903a(a)(4)) for the year or portion of a year of the amount of such uncompensated targeted health assistance expenditures, except that the amount of such payment shall not exceed the amount determined for the state and year or portion of a year under clause (ii). "(ii)maximum amount of additional payment.-the amount determined for a state and fiscal year or portion of a fiscal year under this subparagraph shall not exceed the federal average medical assistance percentage (as defined in section 1903a(a)(4)) for such year or portion of a year of the amount by which- "(i)the amount of state expenditures for targeted health assistance for program enrollees in areas of the state which are subject to a declaration described in section 1903a(b)(6)(a)(i) for the year or portion of a year; exceeds
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"(ii)the amount of such expenditures for such enrollees in such areas during the most recent fiscal year involved (or portion of a fiscal year of equal length to the portion of a fiscal year involved) during which no such declaration was in effect. "(iii)uncompensated targeted "(iii)uncompensated targeted health assistance.-in this subparagraph, the term 'uncompensated targeted health assistance expenditures' means, with respect to a state and fiscal year or portion of a fiscal year, an amount equal to the amount (if any) by which- "(i)the total amount expended by the state under the program for targeted health assistance for the year or portion of a year; exceeds "(ii)the amount equal to the amount of the block grant (reduced, in the case of a portion of a year, to the same proportion of the full block grant amount that the portion of the year bears to the whole year) divided by the federal average medical assistance percentage for the year or portion of a year.
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fiscal year, the secretary shall, not later than 6 months after the declaration described in section 1903a(b)(6)(a)(i) ceases to be in effect, conduct an audit of the state's targeted health assistance expenditures for program enrollees during the year or portion of a year to ensure that all of the expenditures for which the additional payment was made were made for the purpose of ensuring that the health care needs of program enrollees in areas affected by a public health emergency are met. "(4)determination and publication of block grant amount.-beginning in 2019 and each year thereafter, the secretary shall determine for each state, regardless of
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whether the state is conducting a medicaid flexibility program or has submitted an application to conduct such a program, the amount of the block grant for the state under paragraph (2) which would apply for the upcoming fiscal year if the state were to conduct such a program in such fiscal year, and shall publish such determinations not later than june 1 of each year. "(d)program requirements.- "(1)in general.-no payment shall be made under this section to a state conducting a medicaid flexibility program unless such program meets the requirements of this subsection. "(2)term of program.- "(a)in general.-a state medicaid flexibility program approved under subsection (b)- "(i)shall be conducted for not less than 1 program period; "(ii)at the option of the state, may be continued for succeeding program periods without resubmitting an application under subsection (b), provided that- "(i)the state provides notice to
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the secretary of its decision to continue the program; and "(ii)no significant changes are made to the program; and "(iii)shall be subject to termination only by the state, which may terminate the program by making an election under subparagraph (b). "(b)election to terminate program.- "(i)in general.-subject to clause (ii), a state conducting a medicaid flexibility program may elect to terminate the program effective with the first day after the end of the program period in which the state makes the election. "(ii)transition plan requirement.-a state may not elect to terminate a medicaid flexibility program unless the state has in place an appropriate transition plan approved by the secretary. "(iii)effect of termination.-if a state elects to terminate a medicaid flexibility program, the per capita cap limitations under section 1903a shall apply effective with the day described in clause (i), and such
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limitations shall be applied as if the state had never conducted a medicaid flexibility program. "(3)provision of targeted health assistance.- "(a)in general.-a state medicaid flexibility program shall provide targeted health assistance to program enrollees and such assistance shall be instead of medical assistance which would otherwise be provided to the enrollees under this title. "(b)conditions for eligibility.- "(i)in general.-a state conducting a medicaid flexibility program shall establish conditions for eligibility of program enrollees, which shall be instead of other conditions for eligibility under this title, except that the program must provide for eligibility for program enrollees to whom the state would otherwise be required to make medical assistance available under section 1902(a)(10)(a)(i). "(ii)magi.-any determination of
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income necessary to establish the eligibility of a program enrollee for purposes of a state medicaid flexibility program shall be made using modified adjusted gross income in accordance with section 1902(e)(14). "(4)benefits and services.- "(a)required services.-in the case of program enrollees to whom the state would otherwise be required to make medical assistance available under section 1902(a)(10)(a)(i), a state conducting a medicaid flexibility program shall provide as targeted health assistance the following types of services: "(i)inpatient and outpatient hospital services. "(ii)laboratory and x-ray services. "(iii)nursing facility services for individuals aged 21 and older. "(iv)physician services. "(v)home health care services (including home nursing services, medical supplies, equipment, and appliances).
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"(vi)rural health clinic services (as defined in section 1905(l)(1)). "(vii)federally-qualified health center services (as defined in section 1905(l)(2)). "(viii)family planning services and supplies. "(ix)nurse midwife services. "(x)certified pediatric and family nurse practitioner services. "(xi)freestanding birth center services (as defined in section 1905(l)(3)). "(xii)emergency medical transportation. "(xiii)non-cosmetic dental services. "(xiv)pregnancy-related services, including postpartum services for the 12-week period beginning on the last day of a pregnancy. "(b)optional benefits.-a state may, at its option, provide services in addition to the
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services described in subparagraph (a) as targeted health assistance under a medicaid flexibility program. "(c)benefit packages.- "(i)in general.-the targeted health assistance provided by a state to any group of program enrollees under a medicaid flexibility program shall have an aggregate actuarial value that is equal to at least 95 percent of the aggregate actuarial value of the benchmark coverage described in subsection (b)(1) of section 1937 or benchmark-equivalent coverage described in subsection (b)(2) of such section, as such subsections were in effect prior to the enactment of the patient protection and affordable care act. "(ii)amount, duration, and scope of benefits.-subject to clause (i), the state shall determine the amount, duration, and scope with respect to services provided as targeted health assistance under a medicaid
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flexibility program, including with respect to services that are required to be provided to certain program enrollees under subparagraph (a) except as otherwise provided under such subparagraph. "(iii)mental health and substance use disorder coverage and parity.-the targeted health assistance provided by a state to program enrollees under a medicaid flexibility program shall include mental health services and substance use disorder services and the financial requirements and treatment limitations applicable to such services under the program shall comply with the requirements of section 2726 of the public health service act in the same manner as such requirements apply to a group health plan. "(iv)prescription drugs.-if the targeted health assistance provided by a state to program enrollees under a medicaid flexibility program includes assistance for covered outpatient drugs, such drugs
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shall be subject to a rebate agreement that complies with the requirements of section 1927, and any requirements applicable to medical assistance for covered outpatient drugs under a state plan (including the requirement that the state provide information to a manufacturer) shall apply in the same manner to targeted health assistance for covered outpatient drugs under a medicaid flexibility program. "(d)cost sharing.-a state conducting a medicaid flexibility program may impose premiums, deductibles, cost-sharing, or other similar charges, except that the total annual aggregate amount of all such charges imposed with respect to all program enrollees in a family shall not exceed 5 percent of the family's income for the year involved. "(5)administration of program.-each state conducting a medicaid flexibility program shall do the following: "(a)single agency.-designate a single state agency responsible
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for administering the program. "(b)enrollment simplification and coordination with state health insurance exchanges.-provide for simplified enrollment processes (such as online enrollment and reenrollment and electronic verification) and coordination with state health insurance exchanges. "(c)beneficiary protections.-establish a fair process (which the state shall describe in the application required under subsection (b)) for individuals to appeal adverse eligibility determinations with respect to the program. "(6)application of rest of title xix.- "(a)in general.-to the extent that a provision of this section is inconsistent with another provision of this title, the provision of this section shall apply. "(b)application of section 1903a.-with respect to a state that is conducting a medicaid
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flexibility program, section 1903a shall be applied as if program enrollees were not 1903a enrollees for each program period during which the state conducts the program. "(c)waivers and state plan amendments.- "(i)in general.-in the case of a state conducting a medicaid flexibility program that has in effect a waiver or state plan amendment, such waiver or amendment shall not apply with respect to the program, targeted health assistance provided under the program, or program enrollees. "(ii)replication of waiver or amendment.-in designing a medicaid flexibility program, a state may mirror provisions of a waiver or state plan amendment described in clause (i) in the program to the extent that such provisions are otherwise consistent with the requirements of this section. "(iii)effect of termination.-in
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the case of a state described in clause (i) that terminates its program under subsection (d)(2)(b), any waiver or amendment which was limited pursuant to subparagraph (a) shall cease to be so limited effective with the effective date of such termination. "(d)nonapplication of provisions.-with respect to the design and implementation of medicaid flexibility programs conducted under this section, paragraphs (1), (10)(b), (17), and (23) of section 1902(a), as well as any other provision of this title (except for this section and as otherwise provided by this section) that the secretary deems appropriate, shall not apply. "(e)definitions.-for purposes of this section: "(1)applicable program enrollee category.-the term 'applicable program enrollee category' means, with respect to a state medicaid flexibility program for
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a program period, any of the following as specified by the state for the period in its application under subsection (b): "(a)2 enrollee categories.-both of the 1903a enrollee categories described in subparagraphs (d) and (e) of section 1903a(e)(2). "(b)expansion enrollees.-the 1903a enrollee category described in subparagraph (d) of section 1903a(e)(2). "(c)nonelderly, nondisabled, nonexpansion adults.-the 1903a enrollee category described in subparagraph (e) of section 1903a(e)(2). "(2)medicaid flexibility program.-the term 'medicaid flexibility program' means a state program for providing targeted health assistance to
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program enrollees funded by a block grant under this section. "(3)program enrollee.- "(a)in general.-the term 'program enrollee' means, with respect to a state that is conducting a medicaid flexibility program for a program period, an individual who is a 1903a enrollee (as defined in section 1903a(e)(1)) who is in the applicable program enrollee category specified by the state for the period. "(b)rule of construction.-for purposes of section 1903a(e)(3), eligibility and enrollment of an individual under a medicaid flexibility program shall be deemed to be eligibility and enrollment under a state plan (or waiver of such plan) under this title. "(4)program period.-the term 'program period' means, with respect to a state medicaid flexibility program, a period of
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5 consecutive fiscal years that begins with either- "(a)the first fiscal year in which the state conducts the program; or "(b)the next fiscal year in which the state conducts such a program that begins after the end of a previous program period. "(5)state.-the term 'state' means one of the 50 states or the district of columbia. "(6)targeted health assistance.-the term 'targeted health assistance' means assistance for health-care-related items and medical services for program enrollees.". sec.134.medicaid and chip quality performance bonus payments. section 1903 of the social security act (42 u.s.c. 1396b), as amended by section 130, is further amended by adding at the end the following new subsection: "(bb)quality performance bonus payments.-

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